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The market is going to crash on 2025, a severe one. On 2025, all the baby boomers born before 1960 will retire and thus are required to take
distributions out of their retirement accounts. Our population is an aging population where the number of boomers exceeds the number of genXers, and the trend continues where more people have less kids these days. The money to buy boomers stocks must come from the genXers and their kids who are the productive workers at the time. Now if we have more supply than demand what will happen? Stocks are said as the best investment vehicle for the long term. But this is a past performance and as we know it doesnt guarantee future results. In the past we have never seen so many people own stocks. But we have all the financial planners saying how good stock is, now almost everybody put their retirement money into stocks. Would appreciate if somebody can tell me why I am wrong.
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. Would appreciate if somebody can tell me why I am wrong.

Check back in 2026 for the answer.
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well actually you are wrong on the date. You are using 65 as the retirmement age but you aren't required to take distributions from your IRA (I assume this is what you are talking about) until you reach 70. You can also start taking them as early as age 59 1/2 so there will not massive sucking sound as boomers are required to withdraw funds. The selling of stocks will be distributed over a major chunk of time. In fact a lot of boomers might have already sold a lot of their stocks before they are required to take their distributions and have moved their money into more stable vehicles such as bonds. Plus there are hundreds of other factors that will affect the way the market goes. BTW, You aren't the first to propose this theory only the one I heard before started it at 2010 because that's when the first of the boomers will start to retire.

Wolfshead

not worrying about another 1929 just yet
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Would appreciate if somebody can tell me why I am wrong.

Well, you've given a date that is sort of picked at random. That is the date the last of the baby boomers will have reached 65. But most of them will have already retired by then. And you make it sound as though everyone is going to wake up on the same day and sell every single share of stock they own. Distributions start at 59 1/2, and you are required to start taking them at 70. But that means start. They aren't going to sell everything all at once. They're going to sell one year's worth of distributions, then the next year they sell another year's worth of distributions.

Also, in spite of what you read, not every baby boomer has three million in stock sitting around waiting to be sold. A lot of them have only miniscule amounts. And a lot of the ones who do own stock don't have all of it in 401k accounts. A lot of the stock is in other accounts that don't count as retirement accounts. (Simply because there are limits as to what you can keep in your retirement accounts. Many people don't like their 401k offers, and they can only put $2000 a year in an IRA. Many of them save outside those accounts as well as within them). These extra accounts do not have to be distributed according to IRS law. People will simply be taking the dividends on stock they own.

It isn't something I would panic about. There will probably be a gigantic meteorite crashing into the earth before then.

Either that, or we'll wipe out the ozone layer, and we'll be dead. <grin>

Nancy
still wondering what the end will be
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The market is going to crash on 2025, a severe one. On 2025, all the baby boomers born before 1960 will retire and thus are required to take distributions out of their retirement accounts. Our population is an aging population where the number of boomers exceeds the number of genXers, and the trend continues where more people have less kids these days. The money to buy boomers stocks must come from the genXers and their kids who are the productive workers at the time. Now if we have more supply than demand what will happen? Stocks are said as the best investment vehicle for the long term. But this is a past performance and as we know it doesn't guarantee future results. In the past we have never seen so many people own stocks. But we have all the financial planners saying how good stock is, now almost everybody put their retirement money into stocks. Would appreciate if somebody can tell me why I am wrong.

I think you might be focusing too much on the stock price and supply/demand forces to verify the value of your investments. This side of the market is referred to as "Mr. Market" by many of the world's great investors. "Mr. Market" is a fictitious person who represents the day to day selling activity of the market. It is these forces that cause market volatility in day to day pricing, but are only one part of the true value of a stock. In fact most of the great investors say that the stock price is the LEAST important piece of information about a stock.

Remember what a stock actually represents. You have purchased a piece of a company with the hope that either the company will return profits to you (in the form of dividends), or else that the company will grow like crazy therefore making your individual piece of the company larger. Everyone has a different method for determining the intrinsic value of a company, but over a long period of time, companies that have strong earnings and are growing and expanding will also have a stock that increases in value. I believe this will be true no matter what "Mr. Market" does to prices over the short term.

Maybe I am missing something obvious here, but I don't see how baby-boomers retirement at some date in the future will have a long-term effect on the intrinsic value of companies. (For example, do you think Walmart or Microsoft will go bankrupt because of baby boomer retirement, and thus making their stock worthless?) Rather I think some of these companies might actually do better because of the baby-boomer retirement. I agree that supply and demand could affect prices on the short term, and retiring baby-boomers might shy away from riskier investments causing a short term price reduction of these investments. However, over the long term, great companies will continue to create profits, grow and expand regardless of retiring baby boomers.

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You mention genXers and their kids, and a 24 year away date. In some ethnic and income and immigrant and nonimmigrant groups, a generation is fifteen years, while in other groups a generation is twenty-five years.
Perhaps in your worry and hypothesis you should tie your specific date time frame to include genxer's grandkids also?
And consider the effect(s) on your hypothesis/prediction also of the large number of both legal and illegal immigrants, in all their varying income/educational/lifestyle/job/investing levels.
Just considering the latter should occupy you for some time!
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